September 26, 2015

Doomed and damned

Comment on Peter Radford on ‘Beating dead horse?’


There are political and theoretical economics and the differences between the two are crystal clear.
(i) The goal of political economics is to push an agenda, and the goal of theoretical economics is to explain how the actual economy works.
(ii) In political economics anything goes; in theoretical economics, scientific standards are observed.
(iii) Science is methodologically well-defined by the criteria of material and formal consistency.
(iv) Political economics is a honeypot for morons and is accordingly defined by the rules of Circus Maximus.
Almost all of economics is political economics or what Feynman aptly called cargo cult science.#1

You argue: “Yes Krugman can be annoying with his emphasis on his version of the Hicks version of Keynes. But if it serves to get a vital message across to a public largely unaware of the internecine struggles within economics, so what?” (See intro)

Annoyance is not exactly a scientific criterion. The real problem is that Krugman’s arguments have no valid theoretical foundation (2014b; 2014a). The difference between a run-of-the-mill journalist and Krugman is that the latter seemingly speaks in the name of science. Because economics is a failed science this is a flagrant abuse of the authority of genuine science which depends for more than 2300 years on rigorous logical and empirical proof. It has never been the task of science to ‘get a vital message across.’

The ethics of science implies the acceptance of logical/empirical falsification. No such thing ever happened in economics.

“In economics we should strive to proceed, wherever we can, exactly according to the standards of the other, more advanced, sciences, where it is not possible, once an issue has been decided, to continue to write about it as if nothing had happened.” (Morgenstern, 1941, pp. 369-370)

“... suppose they [the economists] did reject all theories that were empirically falsified ... Nothing would be left standing; there would be no economics.” (Hands, 2001, p. 404)

What is the result of manifest scientific incompetence?: “The entire enterprise seems stuck in trenches lobbing diatribe back and forth determinedly with no side going much ground if any at all.” And what is the best thing to do next? “When we are stuck in the trenches we have to keep slogging away. Because to stop is be defeated.” (See intro)

This, in a nutshell, is the perverted methodology of political economics: never accept logical/empirical refutation because it is tantamount to political defeat. And this fully explains the ridiculous performance of economics for more than 200 years.

In political economics it suffices to repeat auto-suggestive mantras: “Austerity is still wrong. Inflation fears are still overblown. And Keynes is still right.” (See intro)

Neither falsification nor annoyance has ever stopped economists from promoting their junk: “It is juvenile to think that we need to stop saying the same things just because the public might get tired of listening.” (See intro)

Who cares that the same things have always been false?

Because of proven scientific incompetence, there is no future for Orthodoxy and traditional Heterodoxy. Krugman, Keynes (2011), Radford, and all the rest have been refuted. These people are not merely annoying, they are wrong on all counts. What can and must be done is to save science from the doomed and damned dead horse economists. Scientists of the world unite!

Egmont Kakarot-Handtke

Hands, D.W. (2001). Reflection without Rules. Economic Methodology and Contemporary Science Theory. Cambridge, New York, NY, etc: Cambridge University Press.
Kakarot-Handtke, E. (2011). Why Post Keynesianism is Not Yet a Science. SSRN Working Paper Series, 1966438: 1–20. URL
Kakarot-Handtke, E. (2014a). Loanable Funds vs. Endogenous Money: Krugman is Wrong, Keen is Right. SSRN Working Paper Series, 2389341: 1–17. URL
Kakarot-Handtke, E. (2014b). Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It. SSRN Working Paper Series, 2392856: 1–19. URL
Morgenstern, O. (1941). Professor Hicks on Value and Capital. Journal of Political Economy, 49(3): 361–393. URL

#1 For details see Wikipedia

For details of the big picture see cross-references Proto-Science/Cargo Cult Science/Science.